Ford Motor Co. profit fell to $1.07 billion in the second quarter, down about 50% from the $2.05 billion it made in the second quarter of 2017.
The Dearborn, Mich.-based automaker blamed its performance on a $482 million loss in China, a $300 million increase in commodity costs because of steel and aluminum tariffs, and a disruption in the production of its top-selling F-150 pickup truck.
After the steep drop in profits, Ford lowered its guidance for the year to $1.30 to $1.50 per share.
A fully autonomous Ford Fusion Hybrid research vehicle on the streets of Dearborn, Mich. (Ford)
“This quarter, we achieved solid results in North America, offset in part by unexpected challenges with our overseas operations and headwinds in the business environment,” CEO Jim Hackett said. “Despite this, our fitness actions continue to take hold, and we’re clearly committed to redesigning and restructuring the underperforming parts of our business.”
Ford also said it expected earnings before interest and taxes charges of $11 billion as it “reallocates capital to opportunities with higher returns,” such as its recently announced autonomous vehicle spinoff and a shift in focus to higher-priced, higher-margin pickups and sport utility vehicles.
“The team is making the hard decisions to raise the returns of underperforming assets where we can via fitness and alternative business models, and we will disposition the rest,” Chief Financial Officer Bob Shanks said. “This type of profound redesign will take time, and we will communicate as decisions are made, such as exiting traditional sedan silhouettes in North America.”